Gold, Silver Prices Today: Gold and silver prices continued their downward trend for consecutive sessions on Monday, mirroring the dip in international
markets as a stronger US dollar weighed on precious metals. As of 9:45 am, gold prices slipped by 1.3 per cent (Rs 1,551) to trade at Rs 1,21,900 per 10 grams, after touching an intraday low of Rs 1,21,825. Silver followed a similar trajectory, falling 1.4 per cent (Rs 2,027) to Rs 1,45,443 per kilogram. Earlier this month, both metals had surged to record highs, with gold hitting Rs 1,32,294 and silver reaching Rs 1,70,415, before easing amid global market corrections and currency strength.
Reasons why Gold and Silver are declining
Ajay Kedia, Managing Director at brokerage Kedia Advisory, told ET NOW Swadesh that, "After reaching a high, gold has retraced itself. Globally, the VIX is falling, and the dollar index is stable. Lower VIX indicates reduced uncertainty, which has supported a strong rally in copper."He further added that the recent rise in crude oil has also led gold and silver to come under pressure... For today, gold faces continued selling pressure due to ETF outflows.
As reported by Reuters, oil prices climbed in early Monday trading as US and Chinese economic officials outlined a framework for a trade deal, easing concerns that tariffs and export restrictions between the world’s two largest oil consumers might impact global economic growth.
To seek profits, investors often shift from precious metals to crude oil, causing gold and silver to decline while crude oil rises.
On the currency front, the US dollar climbed to a more than two-week high against the yen, making gold costlier for holders of other currencies.
However, on the physical buying side, Pranav Mer, Vice President, EBG -- Commodity & Currency Research, JM Financial Services Ltd told the Press Trust of India (PTI) that, physical demand in India weakened in the latter part of the week as buyers trimmed purchases in anticipation of a deeper price correction while lower prices sparked buying interest in China and Singapore.
He further added that, "The latest selloff in gold prices follows profit-taking by investors amid a record run in the bullion market."
Heavy Silver ETF buying
Contrary to this, heavy silver ETF buying is seen amid price discrepancies with MCX futures.Investors are increasingly turning to silver ETFs, with heavy buying activity reported in recent days. Notably, some market participants are purchasing these ETFs on leverage, reflecting heightened demand. However, due to supply constraints and liquidity factors, ETF prices are currently trading at a discount compared to MCX silver futures.
Additionally, with arbitrage (buying) activity currently inactive, the discount has widened further, prompting some investors to book profits from ETFs.
Looking ahead, market analysts suggest that if the discount persists, arbitrage traders may step in by buying ETFs and selling futures, potentially narrowing the gap between ETF and futures prices. Conversely, if the rally remains confined to futures, the discount could widen further.
Analyst Recommendation on Gold and Silver
According to Ajay Kedia, the recommendation is to sell gold at Rs 1,23,800 on MCX, with a stop loss at Rs 1,24,500, and a target of Rs 1,27,000. Since we haven’t seen three consistent negative closes yet, caution is advised.For silver, the monthly close is crucial. A close above USD 50 would complement the 1980–2011 range and give a breakout. Currently, silver is below that, so the recommendation is to sell at Rs 1,44,780, with a stop loss of Rs 1,48,000, targeting Rs 1,44,500.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
